By Sam Bridge
New report says GCC gaming market has seen rapid expansion and is expected to hit $821m by 2021
Video gaming is an exciting opportunity for telecom operators in the Gulf region who can diversify their business using their existing capabilities, according to a new study.
The report by Strategy& Middle East, part of the PwC network, said globally the gaming industry is now worth $129 billion-a-year, bigger in terms of revenue than annual worldwide box office, annual music streaming and album sales, and major sports leagues all put together.
There are close to 2.5 billion gamers worldwide.
“The GCC gaming market has followed the rapid expansion and is expected to hit $821 million by 2021 from $693 million in 2017," said Hicham Fadel, partner with Strategy& Middle East.
“Global games devised by international developers have so far dominated this regional market. This makes it a particularly attractive proposition for operators in the Gulf Cooperation Council region, where more than half the population is under 25 years of age and there is a strong opportunity to create localized gaming content," he added.
According to the Strategy& report, GCC telecom operators who successfully enter the gaming industry would improve their brand positioning and increase the loyalty of their customers.
Gaming would also increase data usage and bring the welcome extra revenue for telecom operators. Significantly, this would allow telecom operators to generate more data about their customers, which in turn will help improve customer experience and increase monetisation.
The report said that although the UAE was the largest gaming market in the region in 2018, Saudi Arabia is expected to expand rapidly and become the largest market from 2019 onwards.
As elsewhere in the world, the mobile gaming segment in the GCC dominates the region’s gaming market when it comes to revenue and penetration.
It added that the top mobile games played in the GCC are PUBG Mobile, Intikam Al Salatin, Fortnite, and Rise of Kingdoms. However, the demand for localised content remains strong and to an extent unfulfilled.
This creates a potential for global players to modify their content to satisfy GCC users, or for GCC users to adapt global content themselves, the study noted.
Indeed, regional players such as gaming studio Falafel Games and Arabic mobile games publisher Tamatem Games have started to emerge through building on their culturally relevant content.
Jad El Mir, principal with Strategy& Middle East said: “It’s no secret that video games are a global cultural tour-de-force. To fully understand the magnitude of its significance, take the video game Grand Theft Auto V – it achieved seven Guinness World Records after its release in 2013, including a world record for $1 billion of sales within three days of its launch.
"It is therefore no surprise that today online streaming services such as Netflix concede that online games such as Fortnite pose a bigger challenge to them compared to their competitors in the same space."
Strategy& said another way for telecom operators to associate with gaming is through investment in eSports, which are spectator events in their own right.
Operators can launch events and form eSports teams to compete worldwide. The unlocking of sponsorship, advertising, and media rights is projected to increase its annual global revenue to more than $1.7 billion by 2021, around 1 percent of the total gaming market.
Johnny Yaacoub, manager with Strategy& Middle East said: "The opportunity eSports represent is phenomenal, and that is compared to some of the biggest sporting events in the world. Take the example of Kyle Giersdorf, known online as Bugha. The gamer won the Fortnite World Cup and took home $3 million – that’s more than the money awarded to the male or female winners of the Wimbledon tennis championship. That’s the scale of this industry."